Income property: what to analyze before you buy
Income, expenses, building condition, existing leases: our brokers’ checklist for a plex or multi-unit building.
Start from actual income
Ask for the current lease of every unit and compare them with advertised rents. In Québec, rent increases are regulated: a low rent today cannot be caught up overnight. Base your analysis on actual income, not theoretical potential.
List every expense
Municipal and school taxes, insurance, utilities if included, maintenance, snow removal, vacancies and a reserve for major work. These expenses determine net operating income, the basis of any valuation.
Assess the building’s condition
Roof, windows, plumbing, electrical, foundation: an inspection by an inspector experienced with income properties is essential. Upcoming work should be costed and reflected in your offer.
Financing and return
Financing rules differ depending on the number of units and whether you live in the building. Calculate your down payment, payments and monthly cash flow before committing.
Our CENTURY 21 Collection Commercial team can prepare a complete analysis with you before you make an offer.
Have a project in mind?
Talk to a CENTURY 21 Collection broker.